Working Paper 196 TALENT MANAGEMENT: AN INDIAN PERSPECTIVE Madhavi Mehta and Satinder Gill The purpose of the Working Paper Series (WPS) is to provide an opportunity to IRMA faculty, visiting fellows, and students to sound out their ideas and research work before publication and to get feedback and comments from their peer group. Therefore, a working paper is to be considered as a pre-publication document of the Institute. Institute of Rural Management Anand Post Box No. 60, Anand, Gujarat (India) Phones: (02692) 260181, 260186, 260246, 260391, 261502 Fax: 02692-260188 Email: [email protected]Website: www.irma.ac.in August 2006
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Working Paper 196
TALENT MANAGEMENT:
AN INDIAN PERSPECTIVE
Madhavi Mehta and Satinder Gill
The purpose of the Working Paper Series (WPS) is to provide an
opportunity to IRMA faculty, visiting fellows, and students to sound out
their ideas and research work before publication and to get feedback
and comments from their peer group. Therefore, a working paper is to be
considered as a pre-publication document of the Institute.
Employee turnover is an important reason forcing the organisations to work
on managing the talent they have or would want to have. Skyrocketing costs
of turnover is certainly an issue but overall impact of increasing employee
turnover, is more significant and far-reaching. Other reasons necessitating the
need to look into TM in India include the rapid changes in the economy
resulting in a boom in the job market, the internet revolution and, easy
accessibility to the net and job portals. The study being reported has also
examined the reasons making TM critical in India and the same are discussed
later in the paper.
2.4 TM Interventions
It is important that organisations intervene in order to manage their talent.
Some of the interventions that the Mckinsey report suggests are fairly
conventional, and often overlooked, such as: redesigning pay package for
best performers, weeding out mediocre performers, holding line managers
responsible for talent development. An important and less conventional
intervention it suggests is to develop an employee value proposition (EVP)
that will help attract and retain the talent you need. „An EVP … provides a
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way for companies to think clearly about what distinguishes them as
employers and to send consistent and compelling messages to the labour
market‟ (Cliffe 1998: 19). In order to develop an EVP, the organisation
needs to ensure that its key employees are treated in accordance with their
needs. The „key employees gravitate towards one of four basic brand
positions. “Go with a winner” employees are most interested in growth and
advancement, “big risk, big reward” players value advancement and
compensation. Those out to “save the world” need an inspiring mission,
while “lifestyle” employees seek flexibility and a good fit with the boss‟
(Cliffe 1998: 19).
In India, one finds that organisations started grappling with the issues related
to TM in the 90‟s. Some organisations used the conventional strategies
whereas the others designed and implemented innovative interventions to
Box-1
Interesting TM Practices in Indian Organisations
Asea Brown Boveri (ABB) has systems of team-based compensation and appraisals
delinked from rewards that were geared exclusively to the development of its management
staff. ABB also managed to maintain a flat structure of grades which it believed resulted
in better business efficiency through better internal communication.
The Shell, seemed to be comfortable in operating a 360 degree feedback system. By this
performance appraisal system, assessments were kept confidential from the boss. The
system was designed to stimulate individual development.
Thermax (TL) used the concept of a campus ambassador to woo prospective candidates
from engineering colleges. It also had a policy of documenting and creating knowledge
silos to face the challenge of the flight of talent. The employees satisfaction survey in TL
clearly brought out the fact that the improvement of business processes would lead to
better satisfaction levels as it was perceived that with such improvements in place, work
would be done in more planned ways.
NIIT has practices that are both innovative and thought provoking. The company used a
cafeteria approach for career development, moving from the issue of grappling with
retention to the issue of “staying” in the Company. “Heart-cuffs” were more important
than “hand-cuffs”. Hence the company designed some interesting sentiments centred
allowances ….geared to satisfy individual needs.
(Source: Sriram and Bhaduri 1998).
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deal with the issues of TM. Box 1 briefly describes some interesting practices
of some of the organisations in India.
3.0 THE RESEARCH STUDY
In the previous section we have given an over view of the existing literature
on TM. In this section, we present the empirical research that was conducted
to ascertain the Indian perspective on the theme: Talent Management.
The research being reported is focused on understanding perceptions of HR
professionals with respect to: (a) Important components of TM in India, (b)
TM as a critical HR intervention area, (c) Reasons making TM a critical HR
issue, (d) Engagement of organisations with TM and how, (e) Focus of TM
interventions and strategies, (f) TM interventions – frequency of their usage
in respondents‟ organisations and respondents‟ perception of their
effectiveness.
The research reported here is primarily a questionnaire survey, which also
embodies qualitative perspective of HRD professionals. It is a descriptive
study conducted to bring forth various aspects related to TM as perceived by
HRD professionals in India. The research tool is constructed based on the
available literature, which is largely conceptual in nature and not empirical. It
is a questionnaire containing 31 questions. The questions include those
seeking background information about the individual respondents as well as
that about the current organisation of the respondents. The questions related
to TM are based on the aforementioned research objectives. The
questionnaire contained both open ended as well as close-ended questions.
The questionnaire was e-mailed to about 800 HRD professional across the
country and we received 82 responses. Most of the responses were through
e-mail however, a few respondents sent print copy of the questionnaire along
with their response.
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Figure-1
Components of TM
4.0 FINDINGS OF THE STUDY
4.1 Profile
The analysis suggests that profile of respondents studied is predominantly
male (87.8%), below 40 years of age (56.4%), post-graduate (92.7%), with
tenure of 1-5 years in their current position (85%), occupying middle and
above level positions in the management (97.6%) with work experience of up
to 20 years (72.5%). On the other hand, the profile of the organisations
represented in the sample studied is predominantly private sector (80.5%),
private limited companies (31.7%), established for more than 20 years
(75.7%), in service industry (51.2%), employing more than 1000 employees
(57.5%).
4.2 Components of TM
Figure 1 below explains the respondents‟ views on what constitutes TM.
Creating performance-oriented culture, defining key talents and retaining
premium employees, are the three major components as close to three forth
of the respondents (73.2%) perceive them to be important components of
TM. Furthermore, the respondents have perceived activities such as training
and developing talent (65.9%), planning for talent acquisition and attracting
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key talent (61% each) as important. It is pertinent to note that a little more
than half of the respondents (53.7%) did not perceive identification of key
position in the organisation as an important component of TM.
4.3 TM as a Critical Intervention and Business Priority
An overwhelmingly large majority of the respondents consider TM to be a
critical HR issue in India (95.1%) and in their organisation (90.2%). As
Figure 2 depicts, a little more than two third (67.5) of the respondents
perceive TM to be a highly critical issue whereas a little less than one third of
the respondents (30%) perceive it to be a critical HR issue. It is only a very
small number of respondents (3%) who think that TM is somewhat critical. It
is important to note that not a single respondent perceives TM as “not at all
critical an HR issue”.
When asked if TM was a business priority for their organisation, a large
majority of the respondents (85.4%) responded in the affirmative. The
correlation analysis of the data also indicates that the large majority of the
respondents belonging to the middle management and above category
believed that TM is a business priority for their organisation, whereas the
respondents who belonged to the supervisory cadre did not consider TM as a
business priority for their organisation. The number of years spent in HR area
Figure-2
TM as a Critical HR Issue
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is also correlated with the respondents‟ view regarding TM as a business
priority for their organisation. All the respondents with thirty-one years and
above of total HR experience agreed that TM was a business priority for their
organisation. Similarly all the respondents from the organisation which have
been in existence for more than 50 years had the same opinion.
The response of the large majority of the respondents to the question whether
their organisation engaged in TM was also in affirmative. Correlations
analysis indicates that respondents in the supervisory cadre responded in
negative even to the question related to their organisation engaging in TM.
All the respondents from organisations which have been in existence for
more than 50 years responded that their organisations also engaged in TM
activities.
4.4 Reasons Making TM a Critical HR Issue
The data collected to ascertain the reasons that make TM a critical issue in
India or in the respondents‟ organisation (RO) is provided in Table 1.
Attrition of talented workers (82.9% in India and 89.7% in RO) and poaching
by competitors (68.3% in India and 56.4% in RO) are perceived by majority
of the respondents as reasons making TM a critical HR issue. Close to half
the respondents also consider increased demand for work-life balance (46.3%
Table 1
Reasons Making TM a Critical HR Issue
Sl. No.
Reasons In India In Respondent
Organisation (RO)
1 Attrition of talented workers 82.9 89.7
2 Prospect of labour shortage 36.6 23
3 Worker dissatisfaction and defection 36.6 23
4 Poaching by competitors 68.3 56.4
5 Increased demand for work-life balance 46.3 41
6 Expectation of meaningful work 48.8 44
7 Entrepreneurial ventures by talented employees 36.6 12.8
8 Increasing workforce diversity 36.6 28.2
9 Inadequate skills of new recruits 30 36
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in India and 41% in RO) and expectation for meaningful work (48.8% in
India and 44% in RO) as reasons making TM a critical HR issue. It is
important to note that reasons such as prospect of labour shortage, worker
dissatisfaction and defection, increasing workforce diversity, entrepreneurial
ventures that are relatively new phenomena are also becoming relevant now
in the Indian context. Inadequate skills of new recruits is also considered an
important reason (by 30% for India and 36% for RO) making TM a critical
HR issue.
4.5 TM Policy
Though a little more than half of the respondents (56.4%) agreed that their
organisation had a formal TM policy, only 20.5% of the respondents shared
information about TM policy in their organisations. (See box 2 for a snap
shot of TM policy of some of the organisations that the respondents belonged
to.)
Box-2
Snapshot of TM Policy of some of the Respondents’ Organisations
“We believe in the basic instinct of human kind of having due environment to grow,
providing all possible help to grow in the designated professional field and let free the
talent to do the rest for the benefit and growth of an individual…”
“Keeping in view the concept of globalisation and stiff competition in the market, we
take due care for identification, acquisition, training and development and retention of
our workforce.”
“Retention based hiring compensation management, competency management – role
and need based training, career development, employee engagement, leadership
programmes…”
“We only pick up the best recruits from premium institutes and give them a free reign to
work on their projects…”
“Role specific incentive schemes, various learning and developments strategies, anti-
attrition measures, etc.”
“It operates on the right associate at the right time in the right place.”
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As briefly described in the box, the TM policies of the Respondent
Organisations are broadly related to providing the right kind of environment
that gives the employees space to grow and contribute. Some organisations
focus on recruitment and selection, whereas, some others focus on retention
strategy. However, some organisations focus on specific interventions such
as hiring, compensation, training and development, career development,
incentive schemes, competency mapping, development centre etc.
4.6 Focus of TM Interventions and Strategies
As indicated in Figure 3, an overwhelmingly large majority (93%) believe
that while designing TM intervention, both – motivation factors as well as
hygiene factors should be focused. Not a single respondent said that hygiene
factors are the only factor that should be considered while designing TM
interventions. It is important to note that there were a few respondents (7%)
who believed that only motivation factors should be focused on while
designing TM intervention strategy. This was the view largely emanating
from the respondents whose organisations are relatively young i.e. 5-10 years
of age. When asked about TM acquisition strategy, a little over four fifth of
the respondents (81%) were of the opinion that organisation should be both
making as well as buying talent and 17% of the respondents were of the view
that organisations should be using „make‟ strategy rather than „buy‟. Though
small in number, 2% of the respondents were in favour of only the „buy‟
strategy.
Figure-3
TM Interventions Design Strategy
Focus of TM Acquisition Strategy
17%
2%
81%
Making Talent Buying Talent Both
Focus of TM Intervention design
7%0%
93%
Motivation Factors Hygiene Factors Both
7% 0%
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It is important to note that in the study we found that all the respondents were
of the view that line managers are one of the most important players as far as
TM is concerned.
4.7 Objectives of TM Interventions
The literature in the western context suggests the following as the objectives
of TM Interventions in organisations:
i) Identify, select, and cultivate super keepers,
ii) Find, develop, and position highly qualified backups for key positions, and
iii) Allocate resources (compensation, training, coaching, and job assignments) to employees based on their actual or potential contribution to excellence (Blanchard and Blanchard, 2005).
Table 2 provides information on respondents‟ perceptions regarding
objectives of TM interventions. Developing high potential individuals
(73.2%) and retaining key staff (70.7%) seem to be two most important
objectives of TM interventions according to the respondents. Some other
important objectives of TM according to the respondents are meeting future
Table 2
Objectives of Talent Management
Sl.
No. TM Objectives Yes No
1 Developing high potential individuals 73.2 26.8
2 Growing future senior managers 56.1 43.9
3 Enabling achievement of strategic organisational goals 46.3 53.7